Standard & Poor's Corp. placed Philadelphia's CCC rating on Credit Watch with positive implications Friday, saying the city with the worst rating in the nation might soon earn its first upgrade in 16 years.

The announcement, which applies to $1.3 billion of outstanding debt, came in response to the Pennsylvania Legislature's approval last week of an oversight authority for the city. The authority plans to issue deficit bonds on behalf of Philadelphia, which has been shut out of the credit markets because of its junk-bond ratings.

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